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Evolution of Manufacturing Enterpises and Industry 4.0

Evolution of Manufacturing Enterpises and Industry 4.0
October 16, 2018

In the initial days of industry revolution, when the organisations were just shaping up, there were no information system to support their activities. Most of the decisions were impulsive, a lack of team work, and no means for information exchange. This can be classified as a multiple dysfunction enterprise.

Over a period of time, organizations became a bit matured. Though the operations were mostly manual, people tried to improve certain KPIs by reducing inventory and procurement cost, and shifting to low-cost procurement by providing some training on job enhancement for higher efficiency, etc. This was the period when enterprises were trying to get organized. We call them semi-functional enterprise.

Gradually, ERP and other enterprise transaction IT systems were introduced. The organizations started to connect internally between different departments and the silos gradually started to vanish. Enterprises started focusing on processes cutting across different departments, rather than only one department. The operations in logistics and warehousing were enhanced due to new material handling equipment, storage solutions, and use of IT systems. Organizations started using forecasting tools for demand forecasting and were getting closer to fulfil customer challenges. This could be termed as the era of integrated enterprise.

Today, organisations are trying to integrate with external enterprises by implementing EDI and other means for data exchange to and from suppliers, customers, and other stakeholders. Firms are now gradually evolving into an extended supply chain. The competition is slowly shifting from effectiveness and efficiency of individual organisation to that of the entire supply chain. This is the era of extended enterprise.

Industry 4.0 manufacturing framework has been conceptualized to take the idea of extended enterprise ahead. It breaks the silos within the organization and with the help of cyber physical systems, it takes the collaboration activity and visibility to a very high level, including OEM and its ecosystem which consists of multilevel partners. Smart manufacturing Industry 4.0 comprises the following components — logistics visibility, integrated planning and execution, procurement 4.0, spare parts management, smart warehousing, autonomous and B2C logistics, and prescriptive supply chain analytics.

Industry 4.0 framework has been conceptualized to take the Extended Enterprise concepts further ahead.

This ecosystem will be enabled by a wide range of digital levers i.e. Cloud, Big Data and Analytics, IoT, 3D printing and Augmented reality, etc. Combining these digitalization levers can enable a new business model of products and services. Digitization levers are integration factor of each link of an organization’s value chain.

Combining digitalization levers like IoT, Big Data & Analytics, Cloud, AR, etc, will enable a new business model of products and services.

While SCOR framework and APQC process classification framework exclusively focuses on processes at various levels and KPIs and best practices, these do not focus much attention on technology and its enablers. From that perspective, Industry 4.0 framework focuses on both technology and processes. It has very balanced approach, enabling industries to adopt it in a big scale step by step. Manufacturing companies will exclusively focus on Industry 4.0 framework in days ahead. But it will be partial adoption in initial days which will lead to the way of full adoption.

HCL as an organization has focused on smart manufacturing Industry 4.0 framework.